FGT poverty measures and the mortality paradox: Theory and Evidence

Mathieu Lefebvre, Pierre Pestieau () and Gregory Ponthiere
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Pierre Pestieau: University of Liège; Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium; PSE and CEPR

No 2013042, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: Income-differentiated mortality, by reducing the share of poor persons in the population, leads to what can be called the "Mortality Paradox": the worse the survival conditions of the poor are, the lower the measured poverty is. We show that the extent to which FGT measures (Foster Greer Thorbecke 1984) underestimate old-age poverty under income-differentiated mortality depends on whether the prematurely dead would have, in case of survival, suffered from a more severe poverty than the average surviving population. Taking adjusted FGT measures with ex- tended lifetime income profiles as a benchmark, we identify conditions under which the selection bias induced by income-differentiated mortality is higher for distribution-sensitive measures than for headcount measures. Finally, we show, on the basis of data on poverty in 11 European economies, that the size of the selection bias varies across different sub-classes of FGT measures and across countries.

Keywords: income-differentiated mortality; FGT poverty measures (search for similar items in EconPapers)
JEL-codes: I32 (search for similar items in EconPapers)
Date: 2013-09-11
New Economics Papers: this item is included in nep-age, nep-dem, nep-dev and nep-eur
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Working Paper: FGT Poverty Measures and the Mortality Paradox: Theory and Evidence (2013)
Working Paper: FGT Poverty Measures and the Mortality Paradox: Theory and Evidence (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2013042

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